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(Bloomberg) — STMicroelectronics NV (STM) shares plunged the most in a year after the chipmaker posted a surprise loss due to restructuring charges.

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The Franco-Italian company had an adjusted operating loss of $133 million in the second quarter, it said in a statement on Thursday. That compared an average analyst estimate for operating income of $54 million according to data compiled by Bloomberg.

STMicro sees a gross margin of 33.5% in the third quarter, the same as the previous period. That compares to 35.4% forecast by analysts.

“Gross margins are well below expectations,” Barclays analysts Simon Coles and Rohan Bahl said in a note about the guidance. “Shares will underperform as the upcycle proves shallower than expected, at least for now.”

Shares fell as much as 13% to €23.39 in Paris, the biggest intraday decline since July 25, 2024. Its shares have fallen 35% in the last year.

STMicro announced a cost-cutting program in October and later committed to reducing its workforce by about 6% due to an extended industry slump. Its second-quarter loss included $190 million in impairment and restructuring charges. The company’s recent performance has fueled criticism of management by the Italian government, which together with the French state owns more than a quarter of the business.

STMicro gets much of its revenue from the automotive industry, which is facing rising pressures from the global trade war as tariffs disrupt the car market. Last week, Renault SA (RNO.PA, RNLSY) cut its guidance for this year’s operating margins, while Stellantis (STLA, STLAP.PA) on Monday reported a surprise net loss in the first half. The levies have upended global supply chains and triggered uncertainties over customer orders. Some carmakers stocked up on chips to preempt tariffs, which threaten to decrease demand down the road.

STM’s revenue fell 14% to $2.77 billion in the second quarter, according to the statement. That compared to an average analyst estimate of $2.74 billion, according to data compiled by Bloomberg.

Car chip sales were slightly below the company’s expectations in the second quarter, balanced by higher revenues in its personal electronics and industrial divisions, it said.

Elon Musk warned Tesla Inc. (TSLA) investors this week that a few “rough quarters” are ahead as incentives like a tax credit for electric vehicles in the US lapse. Tesla is one of STMicro’s largest customers, accounting for around 6% of the company’s revenue, according to data compiled by Bloomberg.

STMicro’s results are similar to those of US peers Texas Instruments Inc. (TXN) and NXP Semiconductors NV (NXPI), “with signs of cyclical recovery offset by tariff related uncertainty and, in particular, automotive weakness,” Citi analysts including Andrew Gardiner said in a note.

Competitor Texas Instruments saw its share price tumble this week on concern that tariffs and trade disputes will hurt a nascent auto chip sales resurgence.

Dutch chipmaker NXP’s Chief Executive Officer Kurt Sievers tried to reassure his shareholders on Monday, saying an end is in sight to a two-year long inventory glut in automotive chips that has been throttling the business.